RTTNews - After trading higher till the mid-session on the back of positive Asian cues and short covering on the last day of monthly derivatives contracts, the Indian market fell sharply in the afternoon amid fears about stretched valuations and a delay in monsoon rains for the June-September season, which could hurt an already slowing gross economy.

However, the market cut its loss significantly in late trading, helped by reports that the monsoon would catch up by the first or second week of July and shortfall so far can be made up in July, if the timing and distribution are good.

Meanwhile, for the second week in a row, inflation remained in negative terrain, declining marginally by 1.14% for the week ended 13 June compared to 1.61% fall in the previous week, government data released on Thursday showed. The wholesale price index stood at 11.80% during the corresponding week a year ago.

After rising to the day's high of 14,578 in the morning, the BSE Sensex hit a low of 14,261 in the afternoon before finishing at 14,346, down 77 points or a modest 0.53%. However, the S&P CNX Nifty fell sharply by 51 points or 1.19% to 4,242, while the BSE mid-cap index slipped 0.20% and the small-cap index edged down 0.45%. The market breadth on the BSE was slightly positive, as advancers outnumbered decliners by 1408 to 1216, with 79 stocks closing unchanged.

Sector-wise, auto stocks bore the brunt of the selling pressure on fears a poor monsoon could hurt rural sales, followed by oil/gas, public sector and consumer durable stocks. Realty and banking stocks, on the other hand, showed small gains.

Construction firm Jaiprakash Associates rose 2.04% and Jaiprakash Hydro Power(JHPL) surged up 8.26% amid reports about a merger between Jaiprakash Power Venture and JHPL , to help them raise around Rs.120-140 billion through the equity route.

UltraTech Cement advanced 3.31% and Grasim Industries added 1.27% on reports about consolidation in their cement businesses after the exit of Larsen & Toubro from UltraTech. FMCG players such as Hindustan Unilever, Tata Tea, ITC and Britannia Industries ended in the red on concerns that a below-normal monsoon in the June-September period would affect their revenues.

Tata Motors tumbled 5.43% on reports that it would report a consolidated business loss of about Rs.300 crore for FY09 driven by poor performance of its UK subsidiary and high interest costs from a Singapore subsidiary. ACC rose 1.73% after it entered into a joint venture agreement with the Madhya Pradesh State Mining Corporation to explore and mine four coal blocks with total reserves of about 200 million tonnes.

Wyeth jumped over 4% after its 4th quarter net profit rose 52% year-over-year. Bharti Airtel edged up 0.13% amid reports that a due diligence on Bharti Airtel's books by MTN will begin next week ahead of a complex mutual acquisition of equity to form one of the top telecom conglomerates of the world.

Tata Communications closed up a modest 0.45% after it signed a five-year deal with the U.K.'s BT Group Plc for voice services. Crompton Greaves rose 0.78% on reports that it is betting big on power projects to be a $8 billion firm.

Sugar stocks ended mostly higher despite the government agreeing to raise the minimum price that mills must pay to farmers for sugarcane by a third to a record high of Rs107.76 per 100 kg in the new season from October as against Rs81.18 per 100 kg in 2008-09.

HT Media fell 2.52% to Rs.94.90 after a block deal of five lakh shares was executed on the BSE at Rs. 97.50 per share. Indiabulls Financial Services rallied 4.44% on the back of a similar block deal on the BSE at Rs.173.25 per share.

Steel manufacturer JSL plunged 6.07% after it announced a consolidated net loss of Rs 609.45 crore for the financial year 2008-09.Navneet Publications (India) jumped 8.26% on better-than-expected March quarter net profit. Ansal Properties & Infrastructure fell 1.90% after its FY09 consolidated net profit fell 81% year-over-year.

Kingfisher Airlines fell 2.34% on reports that BPCL has sued the company in the Bombay High Court to get back its dues worth Rs 300 crore. Areva T&D India rose 1.56% on bagging a Rs.120 crore order from Jindal Steel & Power. Fortis Healthcare ended up 0.50% after it entered into a strategic tie-up with S.L. Raheja Hospital to bring world- class healthcare to the city of Mumbai.

On the BSE, Suzlon topped the traded value chart with a turnover of Rs 231.00 crore, followed by Unitech (Rs 224.09 crore), Reliance (Rs 193.16 crore), Educomp Solutions (Rs 192.27 crore) and Tata Steel (Rs 16,689 crore).

Unitech topped the traded volume chart with trades of over 27.12 million shares, followed by Suzlon (19.37 million), Jaiprakash Hydropower (15.3 million), Cals Refineries (13.16 million) and Reliance Natural Resources (12.42 million).

Elsewhere, the other Asian markets rose for a second straight session, European stock markets fell modestly in early trading on concerns that borrowing costs may rise sooner rather than latter and the U.S. stock futures were little changed before the release of revised figures from the commerce department on first-quarter gross domestic product.

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